It is impossible not to mention the r-word when talking about foodservice and the last 18 months have changed the eating out landscape almost beyond recognition.
The corporate hospitality market and event catering has been particularly tough since the recession began and in some areas, customer numbers are down by 30-40 per cent. At the same time, lunchtime outlets are also suffering as many consumers opt to purchase lunch as a treat rather than a necessity.
Sources say that three-, four- and five-star hotels are also looking for the right recovery plan and many remain under pressure.
The VAT increase to 20 per cent in January 2011 will add further pressure to the foodservice sector.
That has meant outlets have had to adapt to the new economic environment, according to Tony Reynolds, managing director of Reynolds Catering Supplies. “Discount vouchers and marketing promotions have helped mid-market restaurant chains to ringfence their footfall,” he says. “Consumers want consistency, value for money and a comfortable environment and mid-market restaurant chains provide this. Due to their scale, the mid-market restaurants can also offer tremendous deals, which are very popular.”
However, many are eating out less and are reducing their meals to one or two courses per sitting.
Heidi Easby, group food development and innovation director for the Brakes Group, insists that those outlets endeavouring to include regular offers and provide consumers value for money are performing well. “The high street chains have the resources to do such offers, but we also see independents working hard to engage with their customers, whether that be with theme nights or by including provenance on menus,” Easby explains.
In this challenging climate, foodservice operators have to work harder than ever to source fresh produce that will help increase their margins.
Using produce in season can be beneficial and rather than a change in product requests, customers are concentrating on how far their produce will stretch per cover on a daily and weekly basis.
Denis Punter, executive chairman of Total Produce UK, stresses that value remains a big part of consumer choice. “The consumer still wants to eat out either for convenience or because they want to treat themselves and most of us who go out in city centres across the UK over the weekend see full restaurants,” he says. “Weekday consumption outside London and the South East has seen a more significant downturn and value and offers are evident everywhere to encourage purchasers.”
But tourism and relatively good summer weather have also helped bring out some spenders. According to Reynolds, London is benefiting from the weak sterling and lots of European and US tourists are making the effort to come to the capital and make the most of the favourable exchange rate. “The West End and tourist sites are very busy and there’s a real buzz about the forthcoming Olympics,” he says.
Salads and fruit pots are performing well in the prepared sector and a focus on healthy options continues to boost demand. Home-grown fresh produce is also fuelling interest. “There is greater demand for UK-grown fruit, vegetables and salads, which offers fantastic opportunities,” Reynolds says.
Putting good quality, seasonal produce from regional suppliers on the menu offers a wide range of benefits and is a good way of meeting growing demand for British ingredients from consumers, who are much more interested in provenance and seasonality than they were just a few years ago.
“The needs of our customers are diverse and this is reflected in the depth of our offer,” adds Easby. “As well as our core range of year-round produce, we also feature inspiring seasonal speciality products such as crosnes and chervil root. Changing produce seasonally helps to keep menus fresh and enables customers to add value.”
The most forward-thinking companies are considering their options and the possibility of creating a one-stop shop for their customers.
“The ability to have one delivery for fresh produce and meat subsequently provides our customers with the assurance that they are helping reduce the number of vehicles visiting their establishment,” says Easby.
The move by DBC Foodservice to begin selling fruit and vegetables has meant the firm can provide its national customer base with a foodservice solution in one delivery.
“The launch of our fresh fruit and veg category marks a significant moment within our ambitious growth plans,” says Chris Horne, managing director of DBC Foodservice. “By offering a comprehensive range to customers, we are also able to save on food miles by delivering all categories to a customer in one vehicle.”
The company has reported “considerable demand” for this category since it was launched in April, with volumes building rapidly.
The leading foodservice suppliers are working hard to improve their offer, cut costs and reduce waste in order to put themselves in the best possible position in the long term.
“Rising haulage costs makes the logic of focusing on food miles obvious and of course, there is a large segment of the population that is focused on environmental issues,” Punter says.
Reynolds is working hard to reduce its fuel consumption. “Backhauling has saved us 700 miles per week and we’re decreasing the amount of our deliveries to drive huge efficiency,” Reynolds explains. “Our lorry drivers have also increased their mileage per gallon by 30 per cent.”
The firm has recently commissioned Writtle College to calculate its carbon footprint, works with local growers where possible and has consolidated its logistics operations when importing from Europe.
The Brakes Group uses the Green Train service to transport products from Valencia via the Channel Tunnel to the company’s national distribution centre in Corby. This saves more than 2,200 food miles for every round trip.
The group is also tackling the waste issue and has devised a range of Price Saver products to help customers survive the tough economic times. “Our credentials are not compromised with the Price Saver products,” Easby insists. “All are fully traceable, technically approved and Red Tractor where relevant.”
Across the sector, the major players have been able to adapt to the changing foodservice landscape and will have to continue to be flexible to capitalise on changing habits.
Reynolds has enjoyed a 15 per cent rise in new sales over the last year. The company has a workforce of approximately 700 people and has invested £300,000 in food development over the last year.
“Our Waltham Cross facility is really busy and we have a chef director who promotes fresh product to Reynolds’ existing and new customers,” Reynolds points out. “We also have dedicated development teams working closely with our growers.”
Pauleys has continued to innovate and introduced a range of 20 new prepared products this year to give its customers greater choice and fresh ideas.
“The prospects for the longer term will, we believe, remain bright for the foodservice sector,” Punter insists. “People continue to have pressure on their time and while in the short-term disposable income is likely to be under pressure, in the longer term the trend increase in meals outside the home is set to continue.”
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